August 5 (SeeNews) - Bosnia's Federation government has adopted a plan for the restructuring of struggling aluminium producer Aluminij by the end of the year, the prime minister of Bosnia's Federation said.
Aluminij shall continue operations but needs to change its manufacturing concept in order to survive in the new market conditions, Fadil Novalic said in a video file published by the Federation's news agency FENA last week.
"At a meeting with representatives of Aluminij, that is the minority shareholders, the management board, and the union, we adopted conclusions and set a deadline for an attempt to restructure the company, which is the end of 2019," said Novalic.
He added that if the restructuring attempt fails to achieve its goal, other options would be considered, such as Aluminij's liquidation as legal entity and its transformation into a new one.
Novalic said that the restructuring would include job cuts.
"Four groups of employees will be set: those who should retire, those who have three years left until retirement, those without whom the production process cannot be relaunched, and finally those who want severance pay which may only come from the funds of the company," Novalic said.
The Federation's finance minister Jelka Milicevic said that all Aluminij employees eligible for retirement by the end of 2019 will be able to do so.
"The workers who have three years left until retirement have a special status with the Employment Institute. They will receive a salary, and have their taxes and social security contributions paid, and after those three years, they will meet all the conditions for retirement," she added.
The Federation's energy, mining and industry minister Nermin Dzindic said that Aluminij's management has submitted a draft restructuring plan consisting of three phases.
"The first phase is the start of the foundry, the second is the start of the anode plant and the third - the electrolysis plant," Dzindic said.
Mostar-based Aluminij shut down its operations on July 10 after its power supply was cut off due to swelling unpaid bills.
Local media reported in July that the Federation government has decided that Aluminij should continue to operate in the next six months, as during this period it should come up with a rescue plan.
Dzindic said in the video file that the Federation government has given its conditional consent to the potential option of court-approved rescheduling of Aluminij's debt to Elektroprivreda HZHB.
The company has been in persistent trouble over prices of electricity and raw materials. Its outstanding debt to Elektroprivreda HZHB has reached 280 million marka ($161 million/143 million euro), local media reported last month.
Aluminij employs 900 people and has numerous suppliers and partners, including Croatia's Adriatic port of Ploce, where it engages 20% of the port's capacities.
The Federation government controls 44% of Aluminij, followed by the government of neighbouring Croatia with 12%. The remainder is owned by a number of smaller shareholders.
The Federation is one of two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic.
(1 euro = 1.95583 marka)